foreclosure fairness program€¦ · 30/9/2015 · date source: “foreclosure fairness act...

Foreclosure Fairness Program

November 2, 2015

Presented by: Corina Grigoras, Dept. of Commerce

Brigid Henderson, Dept. of Commerce Barb Lloyd, Mass Ingenuity

Welcome!

• Welcome and introductions

• Thank you, planning committee!

Gayle Murdock

Jeff Bean

Kathy Rice

Lynn Yialelis

Maralise Hood Quan

Sandy Barto

Mass Ingenuity

Dept. of Commerce

Why Are We Here?

Foreclosure Fairness Act’s Purpose: To help homeowners and lenders explore

alternatives to foreclosure and reach a resolution when possible.

Why Are We Here Today?

• …because feedback from stakeholders shows a desire for a more consistent body of practice

• …because “topics of interest” have been identified for mediator discussions

• …because Commerce needs to better understand how to support its approved mediators

• …to celebrate our accomplishments so far!

Today’s Goals & Desired Outcomes

Event Goals:

• Mediators deepen their understanding of the FFA statute, federal guidelines, and Commerce’s expectations.

• Mediators expand their skills through sharing best/ effective practices.

• Commerce better understands the expectations of its mediators and how to assist them.

Desired Outcome:

• All mediators develop and apply a consistent body of practice in FFA mediations.

Today’s Structure

• Today’s agenda is built around a structured process:

• May 2015 survey

• FFA timeline & three-prong approach

• Case study workgroups

• Connection to pre-plenary work

Ranked Topics of Interest (May 2015 Survey)

Rank 1 Mediator's discretion to determine good faith.

Rank 2 Federal regulatory guidelines: HAMP, CFPB, etc.

Rank 3 FFA intent and requirements; Commerce's guidelines.

Rank 4 NPV inputs and test.

Rank 5 Multiple mediation sessions and continuances.

Rank 6 Session scheduling and/or re-scheduling mediator discretion.

Rank 7 Setting fees: session(s), rescheduling, cancellations.

Rank 8 Facilitating the document and information exchange.

Rank 9 Avoiding borrower eligibility disputes. Rank 10 Mediator's authority to cancel mediation (per RCW 61.24.163(11)).

Rank 11 Pre-session check-in with the parties, readiness for session.

Rank 12 Joint and shuttle mediation techniques, conducting the session.

Rank 13 Handling complaints against mediators.

Rank 14 Mediator substitutions during the mediation process.

Comments Beneficiary's authority to settle

Comments Borrowers who are poorly or not represented

Today’s Structure (continued)

• May 2015 survey

FFA Timeline & Three-Prong Approach

• May 2015 survey

FFA Timeline & Three-Prong Approach

• May 2015 survey

Survey Feedback

Surveys Overview

May 2015:

• Topics of mediator discussion – 193 responded (14%)

September 2015:

• Borrower and beneficiary representatives satisfaction – 49 responded (15%)

• Mediators’ and DRC’s satisfaction and expectations – 70 responded (48%)

• Fees and scheduling practices – 45 responded (62%)

Feedback from the Beneficiary & Borrower Reps

Your clients’ satisfaction with…

Very or

mostly

satisfied

Very or

mostly

dissatisfied

… the program 42% 47%

… the mediators’ performance 28% 44%

… mediators’ knowledge and application of the FFA

statute 45% 34%

… mediators’ knowledge and application of

Commerce’s guidelines 34% 32%

… mediators’ knowledge of the federal guidelines 16% 50%

… mediators’ knowledge of NPV 16% 58%

Date source: “Borrower and Beneficiary Representatives Satisfaction with FFA” survey, Sept. 2015 (49 responses received)—see survey results on the program website

Mediators’ and DRCs’ Expectations of Commerce

Comments about additional support from Commerce:

• Most feel well supported and need no additional assistance

• Some indicated they would like more guidance or training

• Some would like to see an improved certification form

• A few “try to stay away from Commerce as much as possible”

Date source: “Mediators’ and DRCs’ Expectations and Satisfaction” survey, Sept. 2015 (70 responses received)—see survey results on the program website

Mediators are…

… clear about Commerce’s expectations of them 94% very or

mostly clear

1% very or mostly

unclear

… satisfied with the assistance and support they

receive from Commerce

82% very or

mostly satisfied

3% very or mostly

dissatisfied

… satisfied with Commerce’s program guidelines 90% very or

mostly satisfied

3% very of mostly

dissatisfied

… following Commerce’s program guidelines 91% closely or

very closely

1% loosely or very

loosely

Fees & Scheduling Practices

• 98% of the mediators send a written notice to the parties for every session scheduled

• But only 82% always send one to Commerce

• 70% said the current fees structure is rarely or never enough to cover their costs and compensate for their time

• 43% spend 5-8 hours per session, and 36% spend 9+ hours per session, on average

• 65% had an average of 1-2 sessions per case

• 88% think there should be an increase in session fee (most popular amount was $600)

• Most charge a rescheduling fee (most charge between $50 and $200)

Date source: “Foreclosure Fairness Act Mediator Fees” survey, Sept. 2015 (45 responses received)—see survey results on the program website

Let’s Celebrate Our Accomplishments!

Overall Program Statistics

• Program received $19 million in revenue

• Counseling was provided to over 26,000 homeowners

• Commerce received & processed over 8,000 referrals

• 50% of the closed mediations ended with agreement reached

• More and more agreements are reached before a session occurs

Data as of September 30, 2015

Foreclosure Fairness Fund Revenue

* Funds received in a quarter are for Notices of Default issued in the previous quarter. Reports and payments are due to Commerce 45 days after the end of each quarter (RCW 61.24.174).

1,935,250

1,720,200

692,000

510,250 560,000

1,464,126

1,616,124

1,199,825

2,097,750

1,425,000

861,585

909,665

916,500

933,500

482,250

565,750 734,000

505,500

500,000

1,000,000

1,500,000

2,000,000

2,500,000

$19 Million Received

Foreclosure Fairness Fund Distribution

$17.6 Million Expended

* Expenditures from the Foreclosure Fairness Account are made in compliance with RCW 61.24.172.

Commerce, 3,016,597

AGO, 1,041,691

DFI, 460,950

OCLA, 360,000 HFC,

13,057,526

Balance, 1,192,511

HFC Housing Finance Commission

AGO Attorney General Office

DFI Dept. of Financial Institutions

OCLA Office of Civil Legal Aid

Referrals to Mediation Received

455 439 389 419

687 737 749

477 448 435

349 328 432

Jul -Sep

Oct -Dec

Jan -Mar2012

Apr -Jun

Jul -Sep

Oct -Dec

Jan -Mar2013

Apr -Jun

Jul -Sep

Oct -Dec

Jan -Mar2014

Apr -Jun

Jul -Sep

Oct -Dec

Jan -Mar2015

Apr -Jun

8,175 Referrals Received & Processed by Commerce

Referrals by County

Top 10 Counties Referrals Percent of Total King 3,236 40% Snohomish 1,419 17% Pierce 1,327 16% Spokane 533 7% Clark 388 5% Kitsap 218 3% Thurston 213 3% Whatcom 129 2% Yakima 105 1.3% Skagit 93 1.1%

Mediation Results

Ineligible 11%

Pending 12% No Mediation

Occurred – OTHER

Mediation

Occurred - AGREEMENT

No Mediation

Occurred - AGREEMENT

Mediation

Occurred – NO AGREEMENT

Certified/ closed 77%

Mediation Results Year-Over-Year

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

29% 27%

30% 31% 28%

22% 25%

Agreements reached in/after session Agreements reached prior session

Today’s Agenda

8:00-9:00 Registration and Breakfast

9:00-10:00 Welcome, Introductions, Event Goals, Statistics

10:00-10:45 Session 1: Assignment through Scheduling

10:45-11:00 Break

11:00-12:15 Session 1 Conclusion and Session 2: Document Exchange through Pre-Session Check-in

12:15-12:45 Break & Grab Lunch

12:45-2:15 Session 2 Conclusion and Session 3: Mediation Sessions

2:15-2:30 Break

2:30-4:30 Session 3 Conclusions and Session 4: Certification and Beyond

4:30-5:00 Event Wrap-up

Case Studies Overview

• Four case studies in four sessions • Your workgroup is your table • Written case studies will be handed out at the start of

the session • Instructions will come with the first case • Case will have a scenario, as a group you discuss

• What’s required by statute? • What’s expected by Commerce? • What are effective/best practices as a mediator? • What is the impact on good faith?

• Large group wrap up back in ballroom after break

Case Studies Process

For each session:

• Assign roles

• Read the case

• Answer the questions

• Record Q1 and Q2 on your handout individually

• Record Q3 and Q4 outputs on flipcharts

• Take a break or lunch

• As a large group, wrap up back in the ballroom

Where to Work?

• Breakout rooms for work sessions:

• Tables 1, 3, 6, 13 are in the Ballroom

• Tables 2, 7, 8, 12 in Spruce

• Tables 4, 9, 10 in Cedar

• Tables 5, 11 in Fir

• Read the instructions first

• Use the flipchart for recording

• Bring your flipcharts answering questions 3 and 4 back into the ballroom after each session

• Learn from each other and have fun!

Ground Rules

• Stay focused on case topics

• Encourage everyone to participate

• Keep an eye on the time

• Agree to talk openly and listen for others’ perspectives

• Be inspired by others’ viewpoints

Group dynamics can be challenging, so please use your mediation skills!

Session 1: Assignment through Scheduling

• Topics covered:

• #6 Session scheduling and rescheduling

• #7 Fees and related policies

• Case study write-up is in your packet

• Questions? Find one of us!

• Timing:

• Workgroup 10:00-10:45

• Break 10:45-11:00

• Return here 11:00

Go forth and discuss!

Case Study Wrap Up – Session 1

Required by Statute • Session scheduled within 70 days unless otherwise agreed.

(RCW61.24.163(6)) • Scheduling Notice sent to Commerce and parties at least 30 days

prior. Notice must meet RCW requirements. (RCW 61.24.163(7)(b))

• Fee set by statute or Commerce; divided equally between parties. (RCW 61.24.163(17))

Also • Commerce assigns mediator and sends Referral within 10 days.

(RCW 61.24.163(3)(a) and (b))

Expected by Commerce • Copies of all notices (for all sessions) sent to Commerce and the

parties. • Fee and rescheduling policies disclosed in Scheduling Notices. • Reschedule requests are mutual and in writing. • Rescheduling fees and practices are reasonable and consistent.

Also • Parties contacted and scheduling begins. • Borrower contacted if non-responsive borrower representative. • Representation options provided to un- or poorly represented

borrowers.

Mediator Discretion, Best/Effective Practices

NOTE: Themes from the group flipcharts will be captured in the Summary Notes and posted on the FFP website.

Impact on determination of good faith participation

Session 2: Document Exchange through Check-In

• Topics covered:

• #8 Facilitating the document exchange

• #10 Mediator’s authority to cancel

• #11 Pre-session check-in, readiness

• Borrowers poorly or not represented

• Timing:

• Workgroup 11:30-12:15

• Lunch 12:15-12:45

Required by Statute • Borrower submits documents within 23 days from Notice receipt.

(RCW 61.24.163(4))

• Beneficiary submits documents within 20 days from receipt of borrower’s documents. (RCW 61.24.163(5))

• Beneficiary submits NPV inputs. (RCW 61.24.163(5)(g))

• Mediator “may cancel” a scheduled mediation if borrower is unresponsive. (RCW 61.24.163(11))

Also • Mediator may schedule phone conferences to ensure a productive

session. (RCW 61.24.163(7)(a))

Expected by Commerce • Contact parties 1-2 weeks in advance to ensure readiness. • Facilitate the document exchange, clarify requirements, and set

deadlines if disputes arise or process stalls. • Document attempts to contact BOTH borrower and

representative before cancelling a mediation.

Also • Submit certification to all parties & Commerce when mediation

is cancelled.

• Provide borrower representation options to un- or poorly represented borrowers.

Mediator Discretion, Best/Effective Practices NOTE: Themes from the group flipcharts will be captured in the Summary Notes and posted on the FFP website.

Scenario elements impacting Determination of Good Faith

Session 3: Mediation Sessions

• Topics covered:

• #2Federal guidelines

• #4 NPV inputs and test

• #5 Continuances and additional sessions

• Beneficiary’s authority to settle

• Borrowers poorly or not represented

• Timing:

• Workgroup 1:15-2:15

• Break 2:15-2:30

Required by Statute • Beneficiary has authority to settle. (RCW 61.24.163(8)(a))

• Denial provided in sufficient detail for a reasonable person to understand. (RCW 61.24.163(5)(h))

• Session may be continued once after the mediation session commences. (RCW 61.24.163(8)(b))

Also • Session scheduled within 70 days unless otherwise agreed.

(RCW61.24.163(6))

Required by Statute – Also, continued • Mediation convened in county where property located unless

otherwise agreed. (RCW 61.24.163(6))

• All options to avoid foreclosure are exhausted. (RCW 61.24.163(9))

• Borrower(s) attend session in person. (RCW 61.24.163(8)(a))

• NPV test pass/fail is determined if run. (RCW 61.24.163(9)(c))

• Pooling and Servicing Agreement (PSA), other investor restriction, or waiver is provided. (RCW 61.24.163(5)(j))

• Scheduling and convening of additional session(s) follow the same requirements of the 1st session.

Expected by Commerce • Mediator asks for NPV test if retention is desired, determines if

pass/fail. • If mediation continued, a date must be scheduled. • Representation options provided to un- or poorly represented

borrowers.

Also • Scheduling Notice sent to Commerce and parties for each

additional session. • Verify party readiness for each additional session. • Ensure agreements and deadlines are met and documents are

exchanged. • Ensure Power of Attorney (POA) produced if borrower(s) unable

or unwilling to attend session(s) in person.

Scenario elements that impact Determination of Good Faith

Commerce Presentation

• Certification Form

• Mediator Complaints

Certifications

Picture of cert

Sessions & Mediator Information

Check the program website for the most

recent version.

Date, time, and location (city) are required by RCW

(statute), unless no session occurred.

Enter only sessions that occurred. If no sessions occurred, leave these blank. If more than 3 sessions occurred, select

the number of sessions to the right, and use the Comments box on pg. 2 or attach an additional sheet and include the same

info as in these cells.

Enter N/A if no co-mediator participated.

Use these buttons to switch between Print and Edit modes. Type only in Edit mode. Print and/or distribute the report ONLY

from the Print mode.

Please don’t leave these blank! Ensure the info entered here is not in conflict with the rest of

the certification. For example, select No in the first box if the Outcome on pg. 2 is No Session Occurred.

Enter the number of sessions held in “No. of Sessions Convened.” This information is particularly helpful when you held more than 3 sessions, or no session at all.

Select Yes if this is an amended

certification, and No if this is the first issuance.

Only the mediator assigned by

Commerce should appear here, except

in cases of emergency

substitutions (see Program Guidelines).

Select ONLY ONE of the three Outcomes—click on a tab. The outcomes are mutually exclusive.

If you need to switch outcomes AFTER you made checkbox

selections, first click the Clear button (found on each tab). It will clear all selections made

under that Outcome and allow you to select a different

Outcome.

Mediation Outcomes

The 3 NPV questions are derived from RCW requirements (see specific RCW links circled below). Do not leave any blanks or room for guessing.

Mediators MUST carefully read and answer ALL 3 questions. More details about NPV can be found in the Program Guidelines.

Carefully read the instructions in Question 2—

you may need to attach the NPV test OR explain in Comments

why one was not done.

An answer to Question 3 is required by RCW when no agreement is reached. DO NOT leave blank.

Select N/A if no NPV test was done, and explain in Comments.

RCW requires the mediator to certify within 7 business days of the conclusion

of the session. If there is a longer gap between the last session and the

signature date, explain the gap in the Comments box above.

Only the mediator assigned by Commerce can sign the certification. Refer to the

Program Guidelines if mediators substitutions occurred.

Read the red font instructions (pg. 1 of the certification) if you wish to use a scanned

signature.

Only the mediator assigned by Commerce can certify the mediation.

Refer to the Program Guidelines if mediators substitutions occurred.

Use this Comments box for any relevant information, such as loan modification details, missing NPV test, clarifying inconsistencies on your certification, explaining

the gap between the last session and the signature date below, etc.

NPV, Signature, and Date

Do NOT use the purple “Submit Form” button. The purple toolbar is a feature of

the Adobe software; it cannot be “removed” from the certification.

Instead, follow the instructions in red font and click the yellow “Click to Print Report”

button below.

Printing & Distributing

These three columns appear ONLY in Print

mode (when you select the “Click to Print

Button”). If you don’t see these three columns, DO NOT print and DO NOT

distribute the form. You need to use the yellow “Click Print

Report” button on pg. 1.

Printing & Distributing (continued)

Mediator Complaints

192 Tracked Complaints Complainant

Borrower/Representative 56% Beneficiary/Representative 38% Both parties 4% Other 2%

Type of complaint

Conduct only 22% Certification only 18% Other (please specify) 18% Bias only 7% Combination(s) of 2 or more of the above* 35%

At what point in the mediation process

During 75%

Shortly after certification 25%

*Data revised 11/5/2015

Mediator Complaints

• Commerce has authority to maintain a list of approved mediators and discretion to remove mediators. (RCW 61.24.169(1) and (3))

• Complaint Process:

• During mediation process

• Shortly after certification

• Complaints about certifications

• “Avoiding” complaints

Session 4: Certification and Beyond

• Topics covered:

• #1 Good faith determination

• #13 Complaints

• Timing:

• Workgroup 3:30-4:15

Required by Statute • Certification sent to Commerce and trustee, with copies to the

parties, within 7 business days after the conclusion of the session. (RCW 61.24.163(12))

• Certification must include: • whether a resolution was reached • pass/fail if NPV was run (if no agreement) • location, date, time of sessions • all participants • beneficiary’s authority to settle • determination of good faith participation (RCW 61.24.163(12))

Expected by Commerce • Certification submitted per the statutory deadline or provide

explanation of the delay in the Comments section.

• Mediator must send a copy of the certification to Commerce, the trustee, the borrower (regardless of representation), and the beneficiary.

Also • Certification is completed in its entirety. • Use of Comments box for any clarifications, relevant information. • Leave no room for guessing.

How would you certify this case?

How would you respond to the complaint?

Event Wrap-up

• Thank you!

• Next steps

• Evaluation

• Commerce slides

• Output from today

• Future administrative changes

• Continuing education credits

• Index card highlight

Are You Inspired?

“Ite Inflammate Omnia” –

“Go forth and set the world on fire.”

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